Finance and foreign ministers from the six oil-exporting members of the Gulf Cooperation Council (GCC) met in Muscat on Tuesday to hammer out a final statement for leaders to sign at a meeting in December.
The latest draft addressed the issue of independence. “The central bank will be established to replace the monetary council. It has a complete legal independent personality,” a senior GCC official said, reading a copy of the draft to Reuters.
“All the GCC bodies, including the government bodies, are forbidden from giving any directions to the GCC central bank or the national central banks or any of their executive members for the sake of influencing its performance” The GCC launched its monetary union plans in 2001 but progress has been hampered by setbacks. An Omani economy ministry official said on Tuesday that the ministers would discuss at their meeting a possible one-year delay to the implementation of a planned customs union.
“A few issues still remain with the customs union, including the collection and distribution of customs revenues,” Abdul Malik Al Hinai, undersecretary of economic affairs at Oman’s economy ministry, told Reuters. “We are discussing extending the transitional period by one year to the end of next year.”
Inflation has been the key challenge as Gulf states struggled to meet convergence criteria amid soaring prices.
“The objective of the central bank under the agreement is to maintain price stability in the single currency area within the framework of optimal utilisation of economic resources with the aim of maintaining economic stability,” the official said.
He said national central banks would supervise their own banking system but would coordinate with the GCC central bank.
